Stocks remain dull as political uncertainty keeps investors at bay

Benchmark KSE-100 Index remained in negative from the onset of opening trading hours on Monday as investors remained on the sideline due to political uncertainty regarding the outcome of Nawaz Sharif and Asif Zardari’s graft cases.

Market managed to recover the lost ground after National Accountability Court (NAB) convicted Ex-PM Sharif in Al-Azizia Reference Case. The political uncertainty related to ex-President Zardari’s case is largely diminished as the court found irregularities in fake accounts case though adjourning the hearing till 31 December.

An equity analyst at Trust Brokerages said the first day started with the same volatile trend with economic fusses still being the main factor in investors’ decision making. Measures were seen taking as the government is expected to announce reduction in advance tax on brokers’ commission in the upcoming money bill in a bid to encourage investment in the capital market.

“We expect investors to continue to focus mainly on developments over negotiations between Pakistan and IMF (expected in mid of January 2019)”, said Murtaza Jafar, an analyst at Elixir Research.

SNGP was positive as the finance division has announced the approval of around Rs.26 billion for the financial year of 2018-19 to be provided to the SNGP for supply of gas to the export industry at $6.5/MMBTU.

Volumes remained lack luster as 75 million shares traded Monday. Top volume leaders were FATIMA (+2.6%), KEL (+0.2%) and PAEL (+0.9%). On the economic front, The United Arab Emirates has announced its intention to deposit US$3 billion (equivalent to AED11 billion) in the State Bank of Pakistan to support the financial and monetary policy of the country. Moreover, Tuwairqi Steel Mills approaches PM’s adviser to get feedstock gas at cheaper rates.

An equity analyst Ms Arhum Ghous expects market to react with political and economic news flows.